Pregunta
Question 23
of 25 Step 1 of 1
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James deposits a fixed monthly amount into an annuity account for his child’s college fund. He wishes to accumulate a future value of
in 15 years. Assuming an APR of
compounded monthly, how much of the
will James ultimately deposit in the account, and how much is interest eamed? Round your answers to the nearest cent, if necessary.
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Amount James will deposit:
Interest earned: $
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of 25 Step 1 of 1
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Interest earned: $
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Ask by Paul Gross. in the United States
Mar 05,2025
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James will deposit $64,285.20 and earn $20,714.80 in interest.
Solución

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Mind Expander
To find out how much James will ultimately deposit and how much interest he’ll earn, we can use the future value formula for an ordinary annuity:
Where
is the future value ($85,000),
is the monthly interest rate (APR/12),
is the total number of deposits (15 years * 12 months/year), and
is the monthly deposit amount.
First, convert the annual interest rate to a monthly rate and calculate the number of deposits:
- APR = 3.6% or 0.036
- Monthly interest rate
- Total deposits
Now rearrange the formula to solve for
:
Substituting the known values:
Now calculate
and plug in all the numbers to find
.
Once you calculate
and find out the total amount deposited over 15 years, subtract this amount from the future value to find out the interest earned.
Happy calculating!
Amount James will deposit: $
Interest earned: $
Interest earned: $

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